Trustee Loses ‘Reasonably Equivalent Value’ Loan Repayment Fight

A lender paid back in full from a failed business venture prior to the Utah borrower’s bankruptcy secured an appeals court victory over a trustee’s bid to claw back the loan repayment.

Chapter 7 bankruptcy debtor Theodore William White received “reasonably equivalent value” in exchange for guaranteeing and later transferring repayment of a $750,000 loan to business partner Lynn Wardley, the US Court of Appeals for the Tenth Circuit said in a published decision Tuesday.

Trustee J. Kevin Bird challenged the payment under the Utah Uniform Fraudulent Transfer Act, arguing that White didn’t receive much in return for personally guaranteeing ...